Thailand’s Securities and Exchange Commission (SEC) has introduced draft regulations aimed at allowing mutual and private funds to invest in cryptocurrencies, marking a significant step forward in the nation’s evolving digital asset landscape.
Announced on Wednesday, the proposal seeks public feedback on the revised investment criteria for mutual funds venturing into digital assets. The move reflects the growing interest in cryptocurrency investment, as Thailand ranks 10th globally in terms of crypto adoption and remains one of the most crypto-friendly nations.
Crypto ETFs and Investment Tokens
Under the proposed regulations, mutual and private funds will be permitted to invest in crypto exchange-traded funds (ETFs) listed on U.S. exchanges. The SEC also grants funds the flexibility to invest in investment tokens, which have garnered significant interest among Thai investors.
The draft states, “Funds will be allowed to invest in investment tokens, subject to the current investment limits of traditional securities, such as single entity limit, group limit, and concentration limit.”
For institutional investors and ultra-high-net-worth individuals with higher risk tolerance, the SEC will allow unlimited investment in crypto ETFs.
According to Anek Yooyuen, deputy secretary-general of the Thai SEC, the investment ratios for investment tokens will mirror those of transferable securities, such as debt securities, due to their similar risks and features.
Strengthening Fund Regulations and Oversight
The SEC also aims to revise criteria related to the establishment and management of digital asset-focused funds. This includes areas such as asset custody, value calculation, information disclosure, and appropriate advertising to protect investors and ensure transparency.
In June 2024, Thailand approved its first crypto ETF, issued by One Asset Management (ONEAM). The SEC’s endorsement of ONEAM’s Bitcoin ETF marked a significant milestone in Thailand’s regulatory framework for digital assets.
Thai SEC Explores ICOs and Increases Penalties
The regulator is also considering expanding its framework by allowing authorized initial coin offering (ICO) portals to outsource certain operations, pending a public hearing. Additionally, the Thai SEC has initiated a digital asset regulatory sandbox project, which allows 10 private companies to test exchanging cryptos for the Thai baht.
To ensure compliance, the Thai SEC has proposed stricter penalties for crypto firms violating regulations, with the possibility of license revocation for severe offences. Securities firms issuing inappropriate trading orders could face fines ranging from 1 million to 3 million baht, while investors involved in market manipulation will be subject to both civil and criminal penalties.
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